MID to cut incentives in solar power program

People planning rooftop solar-power systems in the Modesto Irrigation District might want to act fast: The amount they can get paid for this energy source is about to drop.

The district board voted 5-0 Tuesday to reduce incentives it pays under a state law that encourages electricity from the sun.

The law requires a reduction of at least 7 percent a year, on the assumption that solar panels are getting cheaper thanks to improved efficiency and mass production.

The MID board went further, cutting the incentives by about 17 percent as of Sunday.

Director Cecil Hensley, in urging the lower rates, said the district should not be paying large amounts to customers seeking to be less dependent on its conventional power.

"We actually lose them as a customer, so to speak, and the other ratepayers are paying for this," he said.

Modesto resident Brad Barker criticized the move.

"You're still stuck in the 20th century," he told the board. "You need to encourage as much as you can for people to switch to solar."

The state law, Senate Bill 1 of 2006, is part of the effort to curtail the fossil-fuel emissions believed to be changing the global climate.

Under Tuesday's vote:

• A new system serving a home or other small load less than 30 kilowatts will bring a one-time payment of $2,000 per installed kilowatt, up to 50 percent of the total cost. That's down from $2,400 for the past year and $2,800 when the program started in 2007.

• New systems of 30 to 1,000 kilowatts, such as those on supermarket or warehouse roofs, will get roughly 13 cents for each kilowatt-hour they generate, up to 50 percent of the installation cost. The staff still is refining this amount. Systems of this size have been getting 16 cents per kilowatt-hour over the past year and earned 23 cents at the start of the program.

A kilowatt-hour is the amount of power produced over an hour from a kilowatt of installed capacity.

Large projects unaffected

Tuesday's vote does not apply to large solar projects, such as one planned for north McHenry Avenue. It has a separate power purchase agreement with the MID, working out to about 17 cents per kilowatt-hour.

The vote does not affect solar projects of any size that are operating or that have complete applications filed by Friday.

The incentives are on top of a federal tax credit that can take up to 30 percent off the cost of solar panels.

The MID has 6.3 megawatts of solar installed and expects applications for an additional 2.6 megawatts at the incentive rates in effect through the end of this week, said Bob Hondeville, energy services manager for the district.

The current capacity is just 1 percent of the MID's peak demand on the hottest summer weekdays. The district is relying mainly on wind power to meet a state mandate to get 33 percent of its power from renewable sources by 2012.

It stands at 12 percent but could reach the goal in a couple of years with wind additions and a proposed plant that would burn orchard wood in the Beard Industrial District. A power purchase agreement for the wood plant could go before the board Aug. 10.

Bee staff writer John Holland can be reached at jholland@modbee.com or 578-2385.